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HEADLINE: Internet poker bill scores a mixed reaction

Story:
Legalizing Internet poker within the state's borders is part of a wide-ranging gambling bill pending in the Iowa Senate.

The legislation would permit poker players to put cash into special accounts held by Iowa casinos, then log on to the password-protected sites from their computers. Out-of-state gamblers and those under the age of 21 wouldn't be allowed to play.

John Pappas, executive director of the Poker Players Alliance in Washington, D.C., which claims 1.2 million members, said he prefers to see Congress pass an Internet gambling bill that would legalize it nationwide. Allowing online poker on a state-by-state basis could balkanize Internet gambling and prevent the industry from developing a critical mass of players needed to provide entertaining games, he said.

"We would be very concerned about proposals that would limit play just to Iowa residents," said Pappas, whose organization has been monitoring the Iowa debate on Internet poker.

But Nelson Rose of Encino, Calif., a professor at Whittier Law School who has written a book on Internet gaming law, believes Iowa lawmakers are being realistic about the prospect of federal action.

Because of politics surrounding the issue, the earliest Congress is likely to approve Internet gambling is 2014, and it could be much longer, said Rose, co-editor-in-chief of Gaming Law Review and Economics.

"The states aren't waiting. New Jersey had a bill that passed both houses" before being vetoed by Gov. Chris Christie, he noted. "California is really seriously looking, and so is Florida and some other states as well."

The Iowa gambling proposal, Senate File 458, is pending in the Iowa Senate Ways and Means Committee and could be considered by the full Senate anytime before the session ends.

Sen. Jeff Danielson, D-Cedar Falls, the bill's sponsor, said he's working to improve the proposal knowing that some senators will never vote for it, and he will seek bipartisan support in the House.

Danielson said his bill is based on states' rights to set policy within their borders. "I will be supportive of a federal law that creates some uniform standards, but I am not going to hold my breath until that happens," he said.

Millions of Americans now gamble online by establishing accounts with offshore Internet casino sites, but it's untaxed and unregulated by the U.S. government.

In 2006, Congress approved the Unlawful Internet Gambling Enforcement Act, which makes it illegal for banks, credit card companies and similar institutions to collect on a debt from an online gambling site. Since then, Congress has considered proposals to establish a federal regulatory and enforcement framework for Internet gambling, but none has been approved.

Pappas and Rose agree the business model in Iowa could fall apart if there aren't enough in-state players to make the games attractive.

"Players want to be able to have the game they want when they want it. So if you go on at 3 o'clock in the morning and you want to be able to play $5 or $10 Omaha, you need a certain mass of players to do that," Rose said.

Terry Rich, chief executive of the Iowa Lottery, has advised state legislators that the future of gambling and lottery games will include an online experience, including Internet-based games played on computers and smartphones.

Rich noted that some European countries have legalized Internet gambling, although he believes such decisions should be made by the state's elected leaders.

"This is the topic that everyone believes is the next venture to protect because there is so much going overseas and to illegal operations," Rich said. "The debate is whether there should be federal legislation. My feeling is that it should protect the state's border so you can have state control, regulation and taxing rather than outside."

Close to 1,000 people receive treatment annually in Iowa for problem gambling, but fewer than 2 percent report Internet gambling as their primary form of wagering, said Mark Vander Linden, director of the Iowa Department of Public Health's gambling treatment program. Slot machines are most frequently mentioned by problem gamblers.

But Vander Linden believes the number of people reporting problems with online gambling will grow if Iowa sanctions Internet poker.

"Whenever you introduce any new form of gambling opportunity, you typically see a spike of users and a corresponding spike of problems which may arise as a direct result of that new form of gambling," Vander Linden added.

The increase in problem gamblers may stabilize over time "but the key is that you are introducing a new and possibly exciting form of gambling," he said.

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